Submitted electronically to: HaveYourSay.Procurement@finance.gov.

au

10 August 2017

Comment on the Review of AusTender data against the Open Contracting Data Standard

Publish What You Pay (PWYP) Australia welcomes the opportunity to provide comment on the
Review of AusTender data against the Open Contracting Data Standard (referred to hereafter as
the Review) undertaken through commitment number 4.3 of Australias Open Government
Partnership (OGP) National Action Plan (NAP).

PWYP Australia is a coalition of humanitarian, faith-based, environmental, anti-corruption, research

and union organisations campaigning for greater transparency and accountability in the extractive
industries. PWYP Australia works with the global Publish What You Pay coalition, a network of over
700 member organisations in more than 42 countries around the world, united in their call for an
open and accountable extractive sector, so that oil, gas and mining revenues improve the lives of
women, men and youth in resource-rich countries.

PWYP Australia wishes to express its extreme disappointment with the engagement from
Government on the progression of this commitment. PWYP Australia is listed in the OGP NAP as one
of two lead civil society organisations for this commitment. At no time during the process was PWYP
Australia consulted on or contacted about the Review, and the Review paper was not sent to PWYP
Australia on its release. PWYP Australia is unaware of any civil society organisation that was engaged
at any point during the writing of the Review. The OGP Australia dashboard currently lists no non-
government stakeholders for this commitment1. The approach Finance has taken for this
commitment goes against the collaborative multi stakeholder approach that OGP endorses.

The Review paper itself does not ask for comment on particular areas, nor does it suggest areas it is
seeking direct feedback on. For that reason this submission makes reference to certain issues

1
https://ogpau.pmc.gov.au/commitment/43-open-contracting

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identified in the Review, but also broadly addresses the area of open contracting and the Open
Contracting Data Standard. We also note that the Review makes no mention as to how this
commitment works in the broader context of the NAP, which includes related commitments 2.1
Release high-value datasets and enable data driven innovation, commitment 3.1 Information
management and access laws for the 21st century and in particular commitment 3.3 Improve the
discoverability and accessibility of government data and information which contains the ambition of
To make it as easy as possible to find, access and use government information and data. This will
include making greater use of centralised, easy to access portals for information (e.g. for grants, and
corporate / administrative reporting),, (sic) proactively publishing more information and data online,
and keeping up to date with the latest technological developments.2

Open data and definition

The Australian Government has stated in its Public Data Policy Statement3 that data should be open
by default. The Review does not define its use of the word open when referring to Government
data. When discussing open data it is important to outline what is meant by the term open as this
has various meanings to different stakeholder groups. PWYP Australia uses the Open Definition4 as
its guide on how open data should be interpreted as Open data content can be freely used,
modified, and shared by anyone for any purpose. PWYP Australia believes that data that does not fit
this definition, even if available to the public, should not be described as open.

Open contracting and the Open Contract Data Standard

Open contracting is based on the principles that citizens, governments, and the private sector
benefit most when the processes and information throughout the contracting chain are transparent
and made available to the public. The motivation for this is to create a level playing field for
investors, to ensure that information is not lost between different government bodies, to demystify
the process for citizens, and to ensure relevant consultations are held and safeguards are met5

2
https://ogpau.pmc.gov.au/australias-first-open-government-national-action-plan-2016-18/commitments/iii-access-government-2
3
https://www.dpmc.gov.au/sites/default/files/publications/aust_govt_public_data_policy_statement_1.pdf
4
http://opendefinition.org/
5
https://resourcegovernance.org/blog/contract-transparency-open-contracting-natural-resources

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The Open Contracting Data Standard (OCDS) which the Review looks at is underpinned by the Open
Contracting Global Principles6. The Open Contracting Global Principles as developed by the Open
Contracting Partnership (OCP) are the foundation on which the implementation of the OCDS is built.
The Principles and the OCDS work together as a guide as to what data should be published and the
rationale for this. The Review makes no mention of these Principles at any point even though the
objective of this commitment in the NAP clearly states Australia will review compliance with the
Open Contracting Data Standard and continue to support the Open Contracting Global Principles.7
Any assessment of the OCDS against Australian standards that does not use the Principles as its
foundation for assessment is inherently flawed, as the OCDS is just the mechanism in which the
Principles are delivered. It is the Principles themselves that contain the value of open contracting
from which citizens and governments benefit, and the Principles which a Government should seek to
implement in accompaniment to the OCDS or a similar system. The OCP website confirms this point
when it quotes Dennis Santiago, Executive Director of the Government Procurement Policy Board of
the Philippines and OCP steering group member that Simply making the information available may
not address transparency and openness to the fullest extent. For this reason, the Principles
embraced under the OCP are truly relevant and useful as they serve as guideposts and tenets on
what category, class or kind of information and data sets should be put forward and made available
in a platform that is easily accessible, intuitive and engaging. PWYP Australia believes that in
ignoring the Principles of the OCP Data Standard, the Review loses the rationale for implementing
the OCDS.

While all the OCP Principles carry equal weight we make mention here of Principle 1; Governments
shall recognize the right of the public to access information related to the formation, award,
execution, performance, and completion of public contracts. Principle 3; Governments shall require
the timely, current, and routine publication of enough information about the formation, award,
execution, performance, and completion of public contracts to enable the public, including media and
civil society, to understand and monitor as a safeguard against inefficient, ineffective, or corrupt use
of public resources. This would require affirmative disclosure of: Contracts, including licenses,
concessions, permits, grants or any other document exchanging public goods, assets, or resources
(including all annexes, schedules and documents incorporated by reference) and any amendments

6
Open Contracting Global Principles https://www.open-contracting.org/get-started/global-principles/
7
https://ogpau.pmc.gov.au/draft-national-action-plan/commitments/theme-4-integrity-public-sector/43-open-contracting

3
thereto; and Principle 4; Governments shall develop systems to collect, manage, simplify and publish
contracting data regarding the formation, award, execution, performance and completion of public
contracts in an open and structured format, in accordance with the Open Contracting Data Standards
as they are developed, in a user-friendly and searchable manner.8 These principles cover the areas in
which the Review noted Australia was found to have the highest level of noncompliance.

The Review makes mention throughout that data as defined by the OCDS are often available in
Australia, with the caveat that it is published through various government agencies and websites, in
varying formats, and to different degrees of disaggregation. As an example, Section 9.4 of the review
in the significance of the noncompliance section states procurement data published by the
Commonwealth may not be as easily collated or analysed by the public as if it were published in
accordance with OCDS schema however applicable procurement data is still made available,
consistent with the objectives of open government. The Review does not identify which objectives
of open government it is referring to, if this is a reference to the OGP or OCP, or even how it defines
open, so this statement cannot be proven. Spreading the data across multiple agencies and in
multiple formats does not make data more accessible to the public and does not make it open.
Making data open also requires ease of use and access. This is part of the rationale of introducing a
standard like the OCDS in that it collates information within one standardised system, removing
duplication and inaccessibility, an important part of the OCP Principles.

The final key area of noncompliance to note is in Contracts: Section 9.9 which finds we are not
complaint in providing granular information about goods and services covered by the awarded
contract. Not mentioned by the Review is that this area of noncompliance is at the core of the
commitment we made in the NAP which the Review is attempting to address. The relevance section
of this commitment states This commitment will advance the OGP values of access to
information and public accountability by demonstrating transparency and accountability in
relation to the procurement of goods and services on behalf of the Government. 9 That the
Review found that we were non complaint in an area that is the foundation of the NAP commitment
and that it did not acknowledge this within the paper is alarming. It also demonstrates how a OGP

8
Ibid
9
https://ogpau.pmc.gov.au/australias-first-open-government-national-action-plan-2016-18/commitments/iv-integrity-public-2

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commitment that is advanced outside the context in which it was developed will fail to address the
issues underpinning that commitment.

Other data standards:

The Review in acknowledging Australias lack of compliance in numerous areas of the OCDS attempts
to redress this by stating that Australia is ranked first on the Global Open Data Index as number one
for publication of procurement data. First; the Global Open Data Index is not an organisation that
seeks to promote greater transparency as stated in the Review; it is merely a directory of ranking.
Second; the measurement of openness of public procurement data used in this index explicitly states
it looks only at tenders and awards of the national/federal government aggregated by office. It does
not look into procurement planning or other procurement phases10 so it is not a complete
assessment of the transparency of the entire procurement process. It also fails to mention that while
we may be number on that metric, overall Australian data as rated by this index was found to be
only 53% open. 11

Myth busting about open contracting

The Review makes mention numerous times to issue of commercially sensitive data possibly being
published should Australia seek to implement the OCDS. The Review also raises the question of how
useful this information is to the public or what is appropriate for the Australian public. These issues
are not fleshed out further in the review. A consultation paper on this commitment with the private
sector and civil society by Finance would have been useful to address these issues in the Australian
context. However we provide the following evidence to pre-empt arguments that have been found
false in this area already.

To begin, it is often argued that open contracting is unachievable as contracts contain commercially
sensitive information that could cause competitive harm if disclosed. This ignores the reality that
contracts are already widely circulated within the private sector and that the more materially
important the contract is, the more likely it is to be required to be disclosed to investors under stock
exchange requirements. The Natural Resource Governance Institute (NRGI) has stated that

10
https://index.okfn.org/place/au/procurement/
11
https://index.okfn.org/place/au/

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confidentiality clauses in contracts do not permit their disclosure. In practice, legislation and/ or
mutual consent supersedes confidentiality clauses. They also found when looking at open
contracting in the extractives sector that there was no evidence that contract transparency scared
off investors and that it could instead reassure financial investors. Countries such as Guinea, Liberia
and Ghana have received significant investment while disclosing contracts.12

Transparency of contracts also guards against corruption, including collusion by companies, as the
publication of contracts means information is more visible and corruption or collusion is more likely
to be discovered. Further, as Transparency International points out, open contracting does not
include proprietary or legally protected information, but rather only information that can and should
be accessible.13 Finally, It is important that this information is available to all stakeholders including
civil society, as they are often the people who are analysing and contextualising what can be
complex information into tangible and relevant information for citizens.14

Cost of open contracting and the cost of corruption.

While the Review states it was not its purpose to determine if changes to AusTender to align it more
closely to OCDS would represent value for money, it mentions numerous times that it believes that
any changes to the AusTender system are likely to be extensive and incur significant costs to
implement, quoting a figure of several million to 10 million dollars for recent small changes.

A full review would need to done for PWYP Australia to properly comment on this, however we wish
to note that the establishment of a new system, or upgrading AusTender to meet the OCDS, is likely
to be a one off cost and may be more value for money that continuing to upgrade a system that isnt
meeting the OCDS and that keeps Australias information dispersed across numerous government
agencies and websites.

The review also does not make mention of the cost of corruption to countries, one of the areas the
OCP principles and OCDS was established to address. 57% of foreign bribery cases prosecuted under
the OECD Anti-Bribery Convention involved bribes to obtain public contracts.15 According to a 2013

12
https://www.open-contracting.org/wp-content/uploads/2016/02/OCP2016_EITI_brief.pdf
13
https://www.transparency.org/whatwedo/publication/curbing_corruption_in_public_procurement_a_practical_guide
14
https://www.hivos.org/focal-area/open-contracting
15
https://www.open-contracting.org/why-open-contracting/

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Eurobarometer survey, more than 30% of companies participating in EU public procurement say
corruption prevented them from winning a contract.16

Globally it is estimated that an average of US$9.5 trillion of public money is spent by governments
through public procurement annually. We could not find similar data in the Australian context but
the European Commission calculated that in the EU around 120 billion is lost each year to
corruption only marginally less than the European Unions total annual budget - and that public
procurement is particularly vulnerable to corruption and a major contributor to this figure17. In
countries that have taken steps towards open contracting, there are identified financial benefits to
the government and its citizens, along with the social benefit of reducing corruption and increasing
transparency.

Examples of open contracting benefits

The OECD Foreign Bribery Report 2014 showed that almost two-thirds of foreign bribery cases it
studied occurred in sectors closely associated with contracts or licencing through public
procurement, including the extractive sector18. This makes open contracting particularly important
for the extractives sector. Awarding of licenses and contracts is one of the primary ways corruption
occurs within the sector, and Australian companies and Politically Exposed Persons (PEP) have faced
allegations of this practice domestically and overseas1920. Contracts are also often negotiated in an
unequal power imbalance between companies and governments with the company having access to
more information during negotiations than a government. Further, open contracting can ensure
that the company awarded the contract is the most qualified, and is giving a fair return to the
country for extraction.

NRGI undertook a review of 51 EITI implementing countries and one subnational region and found
that 29 EITI implementing governments have disclosed at least some of these agreements, and
several more were putting into place actions to make their contracts more transparent,

16
Ibid
17
https://www.transparency.org/whatwedo/publication/curbing_corruption_in_public_procurement_a_practical_guide
18
Preventing Corruption in Public Procurement OECD 2016 http://www.oecd.org/gov/ethics/Corruption-in-Public-Procurement-
Brochure.pdf
19
http://www.smh.com.au/business/mining-and-resources/bribery-scandal-enveloping-listed-australian-miner-sundance-resources-
widens-20161001-grt199.html
20
http://www.smh.com.au/nsw/nsw-government-cancels-mining-licences-tainted-by-eddie-obeid-ian-macdonald-corruption-scandals-
20140120-314iv.html

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acknowledging the role transparency and open contracting can play in reducing corruption in the
extractives sector.21 In Peru, a series of reforms carried out in 2007 saw the routine release of oil
contracts as the country put in place a more transparent bidding process. This resulted in Peru
massively improving the minimum level of royalties it received from 5% to 26% on average.22

The OCP website makes note of areas of success by countries that have forged ahead towards open
contracting, including Ukraine, who established a transparent procurement system called Prozorro.
Developed collaboratively between civil society, government and the private sector, Prozorro to
date has run over 26,000 tenders and has helped save an average of 13% on budgeted spending.
Slovakia has implemented full publication of government contracts which helped expose wasteful
spending and fraud, and South Koreas implemented a transparent e-procurement system KONEPS
which saved the public sector US$1.4 billion in costs and the private sector US$6.6 billion. It also
increased efficiency by reducing the time to process bids from 30 hours to just two.23

Recommendations:
In the context of the Review, PWYP Australia believes that the recommendations for this
commitment should be as outlined in section 3.6.1 and 3.6.2
Publish data in the manner required or recommended by the OCDS (for example, by
publishing regular data releases in machine readable format). This would require AusTender
to be redesigned to meet the requirements of the OCDS or for an alternative data publication
system to be implemented by the Commonwealth ;
Ensure that the data published by the Commonwealth is consistent with the data that the
OCDS requires or recommends is published by (for example, by publishing data about
financial transactions that have occurred under each contract.)

Anything less aspirational than this will only add to the confusing multi system and cross location
data keeping we have now, and would contribute little to increasing transparency, making our data
open or moving Australia towards compliancy with the OCDS.

21
https://resourcegovernance.org/analysis-tools/publications/past-tipping-point
22
https://www.open-contracting.org/wp-content/uploads/2016/02/OCP2016_EITI_brief.pdf
23
https://www.open-contracting.org/why-open-contracting/

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However, in light of the Review being written and released with a complete lack of consultation with
non- governmental stakeholders, and developed in isolation from the OGP and OCP principles which
underpin it, we recommend that Finance release a full consultation paper and seek to actively
engage with all stakeholders to advance this commitment in the full collaborative and participatory
spirit in which this commitment, and the Australian OGP NAP, are intended to be conducted.

Yours sincerely

Jessie Cato

National Coordinator, Publish What You Pay Australia

Email: Jessie.Cato@victas.uca.org.au

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Background to Publish What You Pay Australia
Publish What You Pay is a global campaign for transparency and accountability in the mining and oil
and gas industries. In Australia, the campaign is supported by a coalition of organisations that are
committed to promoting good governance in resource-rich countries to ensure that citizens benefit
equitably from their natural wealth, including through advocacy for the mandatory disclosure of all
payments made between extractive industry companies and governments on a country-by-country
and project-by-project basis.

The current members of Publish What You Pay Australia are:

Action Aid Australia

Aid Watch
Australian Conservation Foundation
Australian Council for International Development
A Billion Little Stones
Burma Campaign Australia
Caritas Australia
Catholic Mission
ChildFund Australia
Columban Mission Institute
Conservation Council of Western Australia
CFMEU Mining and Energy
CAER Corporate Analysis. Enhanced Responsibility
Economists at Large
Friends of the Earth Australia
Global Poverty Project
Greenpeace Australia Pacific
Human Rights Law Centre
Jubilee Australia
Mineral Policy Institute
Oaktree Foundation
Oxfam Australia
Search Foundation
SJ Around The Bay
Tear Australia
Transparency International Australia
Union Aid Abroad APHEDA
Uniting Church in Australia Synod of Victoria and Tasmania
World Vision Australia

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